Antigen-specific T cell tolerance represents an attractive approach to suppress autoimmunity. Over the years we have developed a unique genetically engineered peptide delivery system to counter type 1 diabetes (T1D). Indeed, Immunoglobulin (Ig) chimeras have been designed to carry peptides from insulin beta chain (INS?) and glutamic acid decarboxylase 65 (GAD) and these were effective for prevention and delay of T1D. Lately, however, the suppressive 206-220 sequence of GAD was genetically grafted onto an Ig molecule and the resulting chimera referred to as Ig-GAD2 was able to reverse T1D in NOD mice when the intervention was made at the prediabetic stage where blood glucose level (BGL) was above normal ranging between 160-250 mg/dl. Surprisingly, the regimen led to the formation of new ?-cells in addition to driving effective modulation of autoreactive T cells. However, when Ig-GAD2 treatment was applied at the onset of T1D (BGL ? 300mg/dl) there was no ?-cell formation and recovery from disease could not be achieved. In contrast, if Ig-GAD2 treatment is combined with transfer of bone marrow (BM) cells from healthy mice there was restoration of ?- cell formation which sustained recovery from T1D. Surprisingly, the newly formed ?-cells were not derived from the transferred BM cells but were rather of endogenous origin. Fine analysis of the role BM transfer plays in the recovery from disease revealed that stem cell precursors from the exogenous BM gave rise to endothelial cells (ECs) that migrated to the islet, and assisted in the repair of the vascular network serving the islets and ?-cell formation. This pointed to a new concept in the field and suggests that recovery from overt T1D requires both immune modulation and repair of the islet vascular network. We now found that endothelial cell precursors (EPCs) substitute for the BM cells and assist Ig-GAD2 for induction of ?-cell formation and recovery from T1D. The long term objective in this proposal is to determine whether newly formed ?-cells during treatment with Ig-GAD2/EPCs combination therapy emanate from residual ?-cells or from ?-precursors cells (?PCs) and how the source of the newly formed ?-cells impacts therapy of T1D beyond disease onset which would be highly relevant to human diabetics. Also, we propose to determine whether the combination therapy is broad and extends to other chimeras and whether it would be applicable to practical routes of delivery. Finally, we propose to define the molecular and cellular mechanisms underlying immune modulation driven by combination therapy. Understanding the mechanism by which antigen-specific therapy and endothelial cells lead to suppression of pancreatic inflammation and formation of healthy islets should yield significant information relevant to the development of approaches to reverse established T1D.